Japan's export market has undergone significant changes over the past decade. From the global financial crisis to the COVID-19 pandemic, Japan's export industry has faced numerous challenges. However, Japan has also seen growth in emerging industries that are expected to drive exports in the next decade. In this blog, we will explore the evolution of Japan's export market over the past decade and the emerging industries that are expected to drive exports in the future.
Decline in exports: According to research by MacroTrends, Japan's exports for 2019 were $893.78B, a 3.19% decline from 2018. This decline in exports can be attributed to global trade tensions.
Increase in high-technology exports: Despite the decline in exports, Japan's high-technology exports have been growing. According to Trading Economics, exports of high-technology products have been the engine of Japan's economic growth since 1960. In 2019, high technology exports accounted for 29.5% of Japan's total exports.
Record exports in 2022: Japan's exports hit a record in 2022 as a weaker yen made Japanese products more attractive. A report by Trading Economics states that exports in Japan reached an all-time high of 9001.29 JPY Billion in October of 2022.
Changes in export composition: The composition of Japan's exports has been changing over the past decade. According to a post by OEC, Japan's top exports in 2021 were cars, integrated circuits, motor vehicle parts and accessories, machinery having individual functions, and photo lab equipment. This reflects a growing specialization of Japanese industries in more sophisticated, high-quality products.
Impact of global pandemic: The global pandemic-induced crisis has taken its toll on Japan's trade-reliant economy. In an analysis published by Santander Trade, Japan's balance of trade turned null in recent years, mainly due to plummeting shipments to China and regional markets.
Overall, Japan's export industry has experienced some changes over the past decade, including a decline in exports, an increase in high technology exports, record exports in 2022, changes in export composition, and the impact of the global pandemic.
Japan's exports fell the most since the 2009 global financial crisis in April 2020 as the coronavirus pandemic slammed world demand for cars. The pandemic has had a significant impact on Japan's export industry, causing a decline in exports. Japan's exports fell by 3.19% in 2019, and the country produced its first trade deficit in more than three decades in 2012. These declines in exports can be attributed to global trade tensions and the impact of the COVID-19 pandemic.
Despite the decline in exports, Japan's high-technology exports have been growing. According to Trading Economics, exports of high-technology products have been the engine of Japan's economic growth since 1960. In 2019, high technology exports accounted for 29.5% of Japan's total exports. Japan's information and communication technology (ICT) industry is growing rapidly, and it is expected to continue to grow in the next decade. The industry includes software development, cloud computing, and big data analytics, among others.
Next-generation automobiles: Japan is investing heavily in the development of next-generation automobiles, including electric vehicles and autonomous vehicles. The government is promoting the development of these vehicles through various initiatives, and Japanese automakers such as Toyota and Nissan are leading the way in this field.
Smart factories: Japan is promoting the development of smart factories, which use advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI) to improve efficiency and productivity. The government is providing support for the development of smart factories, and Japanese companies such as Hitachi and Mitsubishi Electric are leading the way in this field.
Life sciences: Japan's life sciences industry is growing rapidly, and it is expected to continue to grow in the next decade. The industry includes pharmaceuticals, medical devices, and biotechnology, among others.
Renewable energy: Japan is investing heavily in renewable energy, including solar, wind, and hydroelectric power. The government is promoting the development of renewable energy through various initiatives, and Japanese companies such as Sharp and Toshiba are leading the way in this field.
Japan's export market has undergone significant changes over the past decade since it was unpredictable and full of obstacles. From the decline in exports due to global trade tensions and the COVID-19 pandemic to the growth of high-technology exports, Japan's export industry has faced numerous challenges and opportunities. Despite the ups and downs, Japan's export market showed resilience and flexibility to adapt to the changing tides of the market.
Industries in Japan are expected to drive the export market in the next decade, including next-generation automobiles, smart factories, life sciences, and renewable energy. Understanding these emerging industries can potentially help your business identify opportunities for growth and expansion in the Japanese market.